Airlines launch fare sale for low-traffic routes
New Delhi: Airlines have lowered fares on short-haul, low traffic routes in June in order to fill seats and maximize revenues.
All-inclusive economy fares now available for Bagdogra-Guwahati at Rs899, Delhi-Jaipur and Bangalore-Goa at Rs1,099, Mumbai-Ahmedabad, Delhi-Dehradun and Hyderabad-Chennai at Rs1,299, Indore-Mumbai, Ahmedabad-Pune, Delhi-Lucknow and Goa-Hyderabad at Rs1,599, among others. Several other routes are also being offered for under Rs3,000.
IndiGo said lower fares will be on sale during 8-10 May for 600,000 seats for travel between 1 June and 31 August.
"After receiving a positive response on the April sale, we are delighted to announce another 3-day Summer Special Offer. We are anticipating an increase in demand beyond summer vacations and are pleased to introduce special fares. This summer special offer will enable us make passenger experience even more hassle free than before,” Sanjay Kumar, chief commercial officer, IndiGo said in a Monday statement.
Most low cost airlines seemed to have matched the fares offered by IndiGo, searches made on online travel portals showed.
Jet Airways too announced a sale last week, offering 24% discount on base fares on its 24th anniversary.
An analyst said airlines are trying to mop up seats by the time lean season starts at the end of June.
“It seems to be an attempt to mop up early bookings for a period that is typically the fag end of the summer season and the beginning of the lean season, in line with the strategy of garnering early bookings and then managing revenue optimization by increasing fares as they get closer to the travel date. Also, it seems to be targeted towards routes where they anticipate that demand might be a trifle slow,” said online travel portal Yatra.com’s Sharat Dhall.
The April-June period, when schools close for summer vacations, is considered peak travel season, the second most profitable after the October-December quarter for airlines.
Airlines rarely come up with sales during the summer season. Most sale offers come towards the end of the season catering to the August-September period which is considered the lean season.
An analyst who did not wish to be named said airlines have increased their capacity over the last one year, with the result that there is more inventory to sell now.
IndiGo, for example, alone has 133 planes mostly plying domestic routes with a 40% market share. So, shifting from its strategy of following sales offered by other airlines, IndiGo has now started launching sales ahead of others to gain the first mover advantage, the same analyst said.
Similarly Air India, he said, is offering a so-called super saver scheme which allows passengers to fly 10 times in the year at a cheaper rate when he pays for it one go.
Passenger traffic grew 14.9% to 9 million passengers during the month, as against 7.8 million a year ago, according to data released by the directorate general of civil aviation (DGCA). The last time it fell below 15% was in September 2015, when it grew 14.56%. To be sure, the slowdown was on a higher base.
Air traffic growth is likely to slow down marginally this fiscal from last year and profitability of airlines will be under pressure, rating firm Icra Ltd said last week. The firm expects domestic passenger traffic to grow by 13-15% during 2017-18, backed by capacity addition and competitive airfares. The 2016-17 fiscal ended at 21.8%—the second consecutive year with 22% traffic growth.